2006 Catering Study: Spreading the word

Half say catering revenue grew in 2006, led by colleges (70% of them) and B&I (66%).

January 14, 2007

Ads add up: In B&I, catering growth is due to promotional efforts, say more than one-quarter of respondents in this segment. Bill Carroll, general manager for Sodexo at Marathon Oil in Houston, says catering accounts for more than 50% of revenue at the account and is growing due to Web and print advertising.

“Our new menu is live on-line,” he says, “and we go out to the community. I sit on the Houston Chamber of Commerce and market [the site] to the chamber, and run a full-page ad in a [local] wedding magazine and national bridal magazines.” Those ads, he says, target Houston-area brides who might be attending college in distant cities.

Colleges, meanwhile, most often cite a growing customer base and customer satisfaction as prompting growth in catering. “We cater 1,900 events per year,” says Dean Wright, director of dining services at Brigham Young University in Provo, Utah. “Our biggest [catering] event last year was the BYU Women’s Conference; we served 5,000 people for one meal. We also did a horticulturalists’ convention attended by 1,500 people. The busiest time of year is Homecoming [during which] we can do as many as 40 to 45 events a day.”

Reaching out: To grow their catering businesses, non-commercial operators continue to look beyond their physical and organizational boundaries, with good reason—only 30% have an exclusive on their organization’s catering opportunities. Of those FSD Catering Study respondents doing catering, 51% do catering on-premise only, while almost as many cater events both on- and off-premise.

“We have been making a real push for business off-campus,” says Karen Focarazzo, director of catering at Fresno (Calif.) State University. “We have exclusive rights to catering on campus, but we are assertively partnering with people and organizations connected to the campus, such as community groups or university donors, to bid for off-campus business.”

Keysor adds that at Maine Medical Center, external catering represents new revenue to the hospital, and her department does market catering services to external entities. But as a non-profit organization—like many in the non-commercial realm—she must keep a tight financial rein on the catering business. “Internal catering is an expense to the medical center,” she explains. “Nutrition Services does bill and cover department costs for services; however, the goal is not to create more expense for the hospital.”

Maximizing revenue: Many in non-commercial also need to be careful how they charge off-premise customers. About two-thirds of FSD study participants say they can and do charge off-premise customers more than on-premise customers. At Maine Medical, for example, “we have a separate catering book to give to external customers listing the price they would be charged,” Keysor says.

BYU Dining Services doesn’t have an exclusive, but captures between 80% and 85% of business, Wright notes, describing off-premise business as “very limited, usually for donors.”

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